Warner-Chambliss Calls for $4 Trillion in Deficit Reduction

The reason I’m tickled by the President’s State of the Union message is that I see the potential alternative, one that nods to an austere deficit reduction document like what Mark Warner and Saxby Chambliss are cooking up.

U.S. Sen. Mark Warner is about to heed his own admonition that Congress “put up or shut up” when confronting the dangerously high federal debt.

The Virginia Democrat and U.S. Sen. Saxby Chambliss, a Georgia Republican, are close to introducing a complex bill that would cut trillions in federal spending, raise some taxes and lower others, and spread the pain of cutting the federal deficit among just about everyone in America.

Nothing will be sacred. Everything is open for cutbacks or change to get spending under control, including defense, Social Security and Medicare. Look for smaller tax write-offs on house payments or charitable contributions. Higher gasoline taxes are likely.

The political cost is so high, Warner said in a recent interview, that the entire plan has to be a single bill – one up-or-down vote.

“The only way you realistically can get there is if you get… one package where everybody can say, ‘I don’t like a lot of it, but the sum of the good it does is worth the pain it will cost,’ ” Warner said. “At the end of the day, this is not going to be a painless process.”

This could have set the basis for the President’s agenda. It has all the elements – compromise with Republicans, each side giving on something they don’t like, “responsible” budgeting, big reform instead of nibbling at the edges, etc. And if the President used the State of the Union to accept this package, which is substantially similar to the Bowles-Simpson cat food report, he would have given it substantial momentum, almost unbreakable momentum.

He didn’t. So this may end up something two Senators propose, without much beyond that.

Incidentally, I have a path to $4 trillion in budget solutions over 10 years – let the Bush tax cuts expire. That’s it. All of this hoop-jumping by these deficit-cutters could be accomplished entirely by moving tax rates back to the Clinton era, when we created over 22 million jobs in 8 years.

That doesn’t mean that some of these other options, like defense cuts, Ag subsidy cuts and cuts to tax expenditures, shouldn’t be explored. But that we’re trying so hard to come up with a “painful” solution, and attacking Americans’ retirement security in the process, when the answer is staring us right in the face, tells you something about the real intentions of people like Mark Warner and Saxby Chambliss.

By the way, given that this is the Cat Food Commission document, it doesn’t kick in until the 2013 budget year. So even Mark Warner and Saxby Chambliss, in theory, would oppose immediate budget cuts.